Support to the privatisation programme in Odisha

Project:
Support to the privatisation programme in Odisha
Providing strategic and social assistance to various stages of Odisha's public enterprise privatisation programme

Like other Indian states such as Madhya Pradesh and Andhra Pradesh, at the end of the 20th century the government of Odisha (formerly known as Orissa) supported numerous state enterprises that were unsustainably centralised, inefficient and expensive. Between 1999 and 2003, the government’s Department of Public enterprises embarked upon a programme of privatisation to address this, the first phase of which we were asked to implement.

Our technical assistance came in two distinct areas. The first of these concerned our advice on the economic and strategic formulation of the programme. We provided strategic advice, in addition to advice on transactions, the hiring of various sub-contractors to undertake specialist tasks, and advising on industry-specific news, trends and privatisation regulation.

However, whilst such reforms were economically necessary for the government of Odisha to maintain economic growth, they had to potential to have a heavy social impact. To minimise the economic problems caused by redundancy for retrenched workers, the second part of our assistance focused on establishing appropriate social protection. We assisted in developing appropriate redundancy packages, which we distributed and monitored. We then assisted in the formulation and implementation of social safety net schemes, for which we provided retraining and counselling for 3000 retrenched workers. We also assessed the social impact of such privatisation programmes, in order to minimise problems in the future.